Iron sector hit by global slowdown

Vale CEO Roger Agnelli has said the global slowdown and its effect on iron ore demand will likely push 50 per cent of producers out of the market. "The next two to three months will clarify who is in the market and who is out."

Those most affected will be juniors with limited access to financing. "Some projects are costly, and raising the money in this environment could be difficult, but if you link up with a large player with financial resources it gives the company a competitive advantage," said Centrex Metals Managing Director Gerard Anderson. The Australian junior has Chinese steel producer Baotou Iron and Steel as a shareholder and is in talks with other Chinese firms.

No matter how depressing the current global situation may be, it's hard to deny that the world will continue to grow and industrializing countries like China and India will continue to lead that growth. While the situation looks bleak for the short term, the long term projection remains positive for continuing global economic growth.

The iron ore juniors that will most likely survive the global crisis and come out on top will be those with well-positioned and managed projects as well as partnerships with larger iron producers and steel manufacturers.

Some news of Adriana Resources Inc.

Adriana Resources Inc. [TSX-V: ADI] is an example of an iron ore junior who has aligned itself with a large steel manufacturer. The Canadian company has plans to become a fully integrated iron ore producer by developing its Brazilian iron ore port facility, acquiring iron ore mineral resources in Brazil as well as advancing its Lac Otelnuk Iron Project on Quebec and the Mustavaara Project in Finland.

Adriana's most interesting project is its port facility near Rio de Janeiro. The area has limited shipping capacity on ports, which is currently frustrating access to foreign markets for iron producers. The company intends to develop a facility for iron ore shipment to steelmakers in Asia and Europe. It is expected the port will ship 10 million tonnes per year with the option to expand to a deep sea port capable of 50 million tonners per year.

The world's leading steel company, ArcelorMittal [NYSE: MT] has agreed to purchase 80 per cent of the port facility for US$40.5 million, which will give Adriana over US$65 million in working capital. The steel giant will also purchase up to 19.9 per cent of Adriana shares and aid the company in finding financing to fund its portion of the US$250 million port.

Currently, shares of Adriana Resources are trading at .40c, down from a 52 week high of US$1.39. Shares of ArcelorMittal are trading at US$30.65, down from a high of US$104.25 in June.

The full article can be seen here http://www.ironinvestingnews.com/129-iron-ore-industry-highlights.html

Suite 1818 - 701 West Georgia St
Vancouver, BC
Canada V7Y 1C6

Telephone: 604.629.0250
Fax: 604.629.0923
Toll Free: 877.629.0150
Email:
info@adrianaresources.com

(TSX-V: ADI)

Sep 11, 2008: News Releases: Adriana Closes $10 Million Financing (more...)

Sep 10, 2008: News Releases: Goldbard Enters Agreement to Acquire MIE Metals Co... (more...)

Aug 29, 2008: News Releases: Adriana Closes $2 million financing (more...)

Aug 20, 2008: News Releases: Adriana Partners With ArcelorMittal (more...)